Indian sugar futures saw range-bound trade on Thursday as the deadlock between farmers and mills over cane price continued even as a leading cane producing state announced its support price for the current crushing season. Uttar Pradesh on Wednesday retained the support price at last year's level of 280 rupees per 100 kg, through growers in the northern state have been demanding a higher price to meet rising production costs.
Uttar Pradesh is the biggest cane producing province in India, the world's leading sugar producer after Brazil.
"Growers in Uttar Pradesh are now expected to bring their cane to mills for crushing," said Indranil Mukherjee, an analyst with Religare Commodities.
At 1030 GMT, the key January contract was flat at 2,822 rupees ($45.12) per 100 kg on the National Commodity and Derivatives Exchange. It opened at 2,833 rupees and moved in the range of 2,821-2,834 rupees.
Usually, the cane crushing season starts in the first week of November in Uttar Pradesh and Maharashtra, the country's top two producing states. But this year it was delayed as farmers and mills could not reach an agreement over the cane price.
Traders said sugar futures are expected to be range-bound until the end of this month as the government is still working on the mechanism to resolve issues to arrest bearish sentiment in the sugar sector arising out of surplus stocks. India started the new sugar marketing year with carry-forward stocks of 8.8 million tonnes. It is expected to produce 25 million tonnes this year against a demand of 23 million tonnes.
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